DIRECTIVE US DEPARTMENT OF LABOR Office of Federal Contract Compliance Programs

Number 306 Date January 29 2013 ADM Notice

1 SUBJECT Complying with Nondiscrimination Provisions Criminal Record Restrictions and Discrimination Based on Race and National Origin

2 PURPOSE The purpose of this Directive is to provide information to federal contractors and subcontractors and federally-assisted construction contractors and subcontractors (contractors) and to OFCCP personnel about (1) the circumstances in which exclusions of applicants or employees based on their criminal records may violate existing nondiscrimination obligations (2) the Training and Employment Guidance Letter (TEGL) 31-11 issued on May 25 2012 to the American Job Center network and other covered entities in the public workforce system by the Department of Labors Employment and Training Administration (ETA) and Civil Rights Center (CRC) and (3) the Enforcement Guidance issued by the Equal Employment Opportunity Commission (EEOC) on April 25 2012

3 EFFECTIVE DATE This directive is effective immediately

4 BACKGROUND In recent decades the number ofAmericans who have had contact with the criminal justice system has increased exponentially It is estimated that about one in three adults now has a criminal history record - which often consists of an arrest that did not lead to conviction a conviction for which the person was not sentenced to a term of incarceration or a conviction for a non-violent crime 1

1 See Written Testimony of Amy Solomon Senior Advisor to the Assistant Attorney General Office of Justice Programs US Department of Justice (DOJ) submitted for EEOC Meeting to Examine Arrest and Conviction Records as a Hiring Barrier (July 26 2011) available at httpwwweeocgoveeocmeetings7-26-llsolomoncfm (last accessed January 25 2013) (citing DOJ Bureau of Justice Statistics data that over 92 million people have a criminal history on file in state criminal history repositories and comparing that to Census data on the number of adults in the US) see also Robert Brame Michael G Turner Raymond Paternoster amp Shawn D Bushway Cumulative Prevalence of Arrest from Ages 8 to 23 in a National Sample 129 Pediatrics 21-27 (Jan 1 20132) abstract available at httppediatricsaappublicationsorgcontent1291121abstract (last accessed January 25 2013)

On any given day about 23 million people are incarcerated2 and each year 700000 people are released from prison 3 and almost 13 million are admitted to- and released from - local jails4

Racial and ethnic disparities are reflected in incarceration rates According to the Pew Center on the States one in 106 white men one in 36 Hispanic men and one in 15 African American men are incarcerated 5

2 Lauren E Glaze Coectional Populations in the United States 2010 NCJ 236319 (Bureau of Justice Statistics Dec 2011) available at ht wwwbmiddots ovcontent ub dfc us O df (last accessed January 25 2013) 3 Paul Guerino Paige M Harrison amp William J Sabol Prisoners in 2010 NCJ 236096 (Bureau of Justice Statistics Dec 2011 ) available at http lbjsojp usdoj govcontentpubpdfp I 0 pdf (last accessed January 25 20 13) 4 Todd D Minton Jail Inmates at Midyear 2010 - Statistical NCJ 233431 (Bureau of Justice Statistics April 2011) available at httpbjsojpusdojgovcontentpubpdfjim10stpdf (last accessed January 25 2013) 5 The Pew Center on the States One in 100 Behind Bars in America 2008 at 6 (2008) available at httpwww pewtrustsorgluploadedFileswwwpewtrustsorgReportssentencing_and correctionsone in 1OOpdf (last accessed January 25 2013)

Additionally on average one in 31 adults is under

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correctional control (ie probation parole or incarceration) including one in 45 white adults one in 27 Hispanic adults and one in 11 African American adults6 Racial and ethnic disparities may also be reflected in other criminal history records For example although African Americans constitute approximately 13 percent of the overall population they account for 28 percent of those arrested8 and almost 40 percent of the incarcerated population9

In light of these racial and ethnic disparities contractors should be mindful of federal antidiscrimination laws if they choose to rely on job applicants criminal history records for purposes of employment decisions Hiring policies and practices that exclude workers with criminal records may run afoul of such laws which prohibit intentional discrimination on the basis of race national origin or other protected bases and policies or practices that have a disparate impact on these protected groups and cannot be justified as job related and consistent with business necessity Policies that exclude people from employment based on the mere existence of a criminal history record and that do not take into account the age and nature of an offense for example are likely to unjustifiably restrict the employment opportunities of individuals with conviction histories Due to racial and ethnic disparities in the criminal justice system such policies are likely to violate federal antidiscrimination law Accordingly contractors should carefully consider their legal obligations before adopting such policies

6 The Pew Center on the States One in 31 The Long Reach ofAmerican Corrections at 5 7 (2009) available at httpwwwpewstatesorguploadedFilesiPCS_Assets2009PSPP l in3l_report FINAL WEB 3-26-09pdf (last accessed January 25 2013) 7 US Census Bureau USA QuickFacts 2010 available at httpguickfactscensusgovgfdstatesOOOOOhtml (last accessed January 25 2013) 8 FBI Uniform Crime Reports 2010 available at httpwwwtbigovabout-uscjisucrcrime-in-the-us2010crimeshyin-the-us-2010tablestable-43 (last accessed January 25 2013) 9 William J Sabol Todd D Minton amp Paige M Harrison Prison and Jail Inmates at Midyear 2006 NCJ 217675 (Bureau of Justice Statistics June 2007) available at htt libmiddotso middot usdomiddot ovcontent ub df middot im06 f (last accessed January 25 2013) These racial disparities in the criminal justice system have been attributed primarily to disparate law enforcement practices and sentencing policies See eg Mark Mauer Justice for All Challenging Racial Disparities in the Criminal Justice System 37 Human Rights 4 (ABA Sec Individual Rights amp Responsibilities Fall 2010) available at httpwwwamericanbarorglpublicationslhuman rights magazine homehuman rights vol37 20 l Ofall20 I0justice

for all challenging_racial disparities criminal justice systemhtml (last accessed January 25 2013)

5 POLICY

a EEOC Enforcement Guidance The EEOC as the federal agency that administers and enforces Title VII of the Civil Rights Act of 1964 42 USC 2000e et seq issued guidance10 on the use of arrest and conviction records in employment decisions This guidance consolidates and updates EEOCs prior guidance regarding the use of criminal records in employment decisions EEOC is the lead agency for interpreting Title VII and OFCCP follows Title VII principles in interpreting Executive Order 11246 as amended Therefore EEOCs guidance will assist contractors in implementing and reviewing their

10 Enforcement Guidance Consideration ofArrest and Conviction Records in Employment Decisions Under Title VII ofthe Civil Rights Act of1964 as amended US Equal Employment Opportunity Commission (April25 2012) httpwwweeocgovlawsguidanceuploadarrest conviction pdf (last accessed January 25 2013) (Enforcement Guidance)

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employment practices in compliance with the Executive Order EEOCs guidance applies to all employers that have 15 or more employees

As described in the Enforcement Guidance the nondiscrimination principles of Title VII prohibit both disparate treatment - intentionally treating members ofprotected groups differently based on their protected status- and disparate impact - the use ofpolicies or practices that are neutral on their face but have a disproportionate impact on members of protected groups and are not job-related and consistent with business necessity Although individuals with criminal history records are not a protected group under the applicable federal laws antidiscrimination laws may be implicated when criminal records are being considered For example studies have shown that employers may treat whites with a criminal record more favorably than similarly-situated African Americans with the same or similar criminal record which would be a form of disparate treatment 11

11 See 42 USC 2000e-2(a) Devah Pager The Mark ofa Criminal Record 108 American Journal of Sociology 937 957-60 (March 2003) available at httpwwwprincetonedu- pagerpager ajspdf (last accessed January 25 2013) See generally Devah Pager amp Bruce Western Race at Work The Realities ofRace and Criminal Record in the NYC Job Market (NYC Commission on Human Rights 2005) available at httpwwwnycgovhtmlcchrpdfrace report webpdf (last accessed January 25 2013)

Additionally OFCCP is aware ofjob announcements that categorically exclude people who have any kind of conviction or arrest and of contractors that screen out job seekers with criminal records by stating that they will only accept applicants with so-called clean criminal records 12

12 Examples of such job announcements that were recently found posted in One Stop Job Banks included the following criminal record exclusions No criminal background Have no criminal history CLEAN criminal background (NO felonies or misdemeanors)

Due to racial and ethnic disparities reflected in the criminal justice system these policies or practices will likely have a disparate impact on certain protected groups in violation offederallaw 13

13 See 42 USC 2000e-2(k)(l)(A)(i)

The following description provided in a notice attached to the TEGL explains these concepts further

EEOC Information on Employer Consideration of Arrest and Conviction History Title VII of the Civil Rights Act of 1964 makes it unlawful to discriminate in employment based on race color national origin religion or sex This law does not prohibit an employer from requiring applicants to provide information about arrests convictions or incarceration But employers may not treat people with the same criminal records differently because of their race national origin or another protected characteristic In addition unless required by federal law or regulation employers may not automatically bar everyone with an arrest or conviction record from employment This is because an automatic bar to hiring everyone with a criminal record is likely to unjustifiably limit the employment opportunities of applicants or workers of certain racial or ethnic groups

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If an employers criminal record exclusion policy or practice has a disparate impact on Title VII-protected individuals it must be job-related and consistent with business necessity

Since an arrest alone does not necessarily mean that someone has committed a crime an employer should not assume that someone who has been arrested but not convicted did in fact commit the offense Instead the employer should allow the person to explain the circumstances of the arrest to determine whether the conduct underlying the arrest justifies an adverse employment action For more information httpwwweeocgovlawsguidancearrest convictioncfin httpwww eeocgovllawsguidancega arrest convictioncfm httpwww nationalreentrvresourcecenter orgdocuments00001 082Reentry Co uncil Mythbuster Employmentpdf

The EEOC explains in its Enforcement Guidance (page 14) that [t]o establish that a criminal conduct exclusion that has an adverse impact is job related and consistent with business necessity under Title VII the employer needs to show that the policy operates to effectively link specific criminal conduct and its dangers with the risks inherent in the duties of a particular position The Guidance describes two circumstances in which the Commission believes employers will consistently meet the job related and consistent with business necessity defense First is when the employer validates the criminal conduct exclusion for the position in question in accordance with the Uniform Guidelines on Employee Selection Procedures (UGESP) Second where validation in accordance with UGESP is not done the EEOC discusses three factors that provide the starting point for analyzing how specific criminal conduct may be linked to particular positions14

14 The EEOC describes these factors as the Green factors See Green v Mo Pac RR 549 F2d 1158 1160 (8th Cir 1977) (approving employers use of these factors in making hiring decisions)

The EEOC explains in its Enforcement Guidance (pages 15-16) the three factors that are relevant to whether a criminal conduct exclusion is job related and consistent with business necessity as follows

1 The Nature and Gravity of the Offense or Conduct - Careful consideration of the nature and gravity of the offense or conduct is the first step in determining whether a specific crime may be relevant to concerns about risks in a particular position The nature of the offense or conduct may be assessed with reference to the harm caused by the crime (eg theft causes property loss) The legal elements of a crime also may be instructive For example a conviction for felony theft may involve deception threat or intimidation [citation omitted] With respect to the gravity of the crime offenses identified as misdemeanors may be less severe than those identified as felonies

u The Time That Has Passed Since the Offense Conduct andor Completion of the Sentence - Employer policies typically specify the duration of criminal conduct exclusion The amount of time that has passed since [an employees or prospective employees] criminal conduct occurred [is] probative ofthe risk he

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pose[s] in the position in question Whether the duration of an exclusion will be sufficiently tailored to satisfy the business necessity standard will depend on the particular facts and circumstances of each case Relevant and available information to make this assessment includes for example studies demonstrating how much the risk of recidivism declines over a specified time 15

15 See eg Keith Soothill amp Brian Francis When Do Ex-Offenders Become Like Non-Offenders 48 HowARD J OFCRIM JUST 373380-81 (2009) (examining conviction data from Britain and Wales a 2009 study found that the risk of recidivism declined for the groups with prior records and eventually converged within 10 to 15 years with the risk of those of the nonoffending comparison groups) Alfred Blumstein amp Kiminori Nakamura Redemption in the Presence ofWidespread Criminal Background Checks 47 CRIMINOLOGY 327 (2009) (concluding that there may be a point of redemption (ie a point in time where an individuals risk of reshyoffending or re-arrest is reasonably comparable to individuals with no prior criminal record) for individuals arrested for certain offenses if they remain crime free for a certain number of years) Megan C Kurlychek Robert Brame amp Shawn D Bushway Enduring Risk Old Criminal Records and Predictions ofFuture Criminal Involvement 53 CRIME amp DELINQUENCY 64 (2007) (analyzing juvenile police contacts and Racine Wisconsin police contacts for an aggregate of crimes for 670 males born in 1942 and concluding that after seven years the risk of a new offense approximates that of a person without a criminal record) Megan C Kurlychek et al Scarlet Letters and Recidivism Does an Old Criminal Record Predict Future Offending 5 CRIMINOLOGY amp PuB POLY 483 (2006) (evaluating juvenile police contacts and arrest dates from Philadelphia police records for an aggregate of crimes for individuals born in 1958 a 2006 study concluded that the risk of recidivism decreases over time and that six or seven years after an arrest an individuals risk of re-arrest approximates that of an individual who has never been arrested)

111 The Nature of the Job Held or Sought- [I]t is important to identify the particular job(s) subject to the exclusion While a factual inquiry may begin with identifying the job title it also encompasses the nature of the jobs duties (eg data entry lifting boxes) identification of the jobs essential functions the circumstances under which the job is performed (eg the level of supervision oversight and interaction with co-workers or vulnerable individuals) and the environment in which the jobs duties are performed (eg out of doors in a warehouse in a private home) Linking the criminal conduct to the essential functions of the position in question may assist an employer in demonstrating that its policy or practice is job related and consistent with business necessity because it bear[s] a demonstrable relationship to successful performance of the jobs for which it was used [citation omitted]

b Best Practices The EEOC Enforcement Guidance recommends a number of best practices for employers to avoid liability for discrimination based on the use of criminal records in employment We commend these best practices to contractors In particular contractors may consider ensuring that any policies and procedures that screen applicants and employees for criminal conduct require an individualized assessment Such policies and procedures should be narrowly tailored to the essential job requirements and actual circumstances under which the jobs are performed to the specific offenses that may demonstrate unfitness for performing such jobs and to the appropriate duration of exclusions for criminal conduct based on all available evidence Like the EEOC OFCCP recommends that contractors as a general rule refrain from inquiring about convictions onjob applications 16

16 Many contractors are prohibited from inquiring about convictions or arrests on job applications by local law See National Employment Law Project Ban the Box Major US Cities and Counties Adopt Fair Hiring Policies to

Further OFCCP

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recommends if and when contractors make such inquiries the inquiries are limited to convictions for which exclusion would be job-related for the position in question and consistent with business necessity Finally information about applicants and employees criminal records should be kept confidential and only used for the purpose for which it was intended

c New Procedures Affecting Contractors that Utilize the Federally-Assisted Workforce System On May 252012 ETA in conjunction with CRC issued TEGL 31-11 about the relevance of exclusions based on criminal records to the existing nondiscrimination obligations of public workforce system entities 17

17 The covered entities to which the TEGL is addressed are the public workforce system and other entities that receive federal fmancial assistance to operate Job Banks to help job seekers in locating and obtaining employment andor to assist employers by screening and referring qualified applicants They include the American Job Centers formerly known as One-Stop Career Centers

The TEGL available at httpwdrdoletagovdirectivescorr doccfmDOCN9230 advises these covered entities to conduct their activities using safeguards to prevent discrimination and promote employment opportunities for formerly-incarcerated individuals and other individuals with criminal records

Contractors subject to the Vietnam Era Veterans Readjustment Assistance Act of 1974 (VEVRAA) are required to list all employment openings with an appropriate local employment service office of the state employment security agency wherein the opening occurs or the appropriate employment service delivery system where the opening occurs 18

18 See 41 CFR sect60-2505(a)2 and sect60-3005(a)3

Other contractors may also utilize such covered entities to list job openings screen job-seekers or receive referrals of qualified applicants All contractors using covered entities whether required by VEVRAA to do so or not can expect that these entities will now follow the procedures outlined in the TEGL and summarized below regarding (a) posting ofjob announcements and (b) screening and referring applicants based on criminal record restrictions

1 Posting job announcements with American Job Centers When an employer (including contractors) registers with an American Job Center (or other covered entity) to use the Job Bank the TEGL requires the covered entity to send the employer a prescribed notice (Notice 1 for Employers Regarding Job Bank Nondiscrimination and Criminal Record Exclusions19

) explaining that the covered entity must comply with federal civil rights laws which due to the likely adverse impact of criminal record exclusions on protected groups generally prohibit categorical exclusions of individuals based solely on an arrest or conviction history Covered entities will be required to use a system (automated or otherwise) for identifying vacancy announcements that include hiring restrictions based on arrest andor conviction records

Remove Unfair Barriers to Employment ofPeople with Criminal Records (Feb 6 2012) available at nelp3cdnnetabddb6b65al4826f92 n5m6bz5bppdf (last accessed January 25 2013)

19 This and the other required notices are attachments to the TEGL

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When covered entities identify job postings that exclude individuals based on arrest andor conviction history they must provide employers that have posted these vacancy announcements a notice (Notice 2 for Employers Regarding Job Postings Containing Criminal Record Exclusions) that gives the employer the opportunity to remove or edit the vacancy announcement

Covered entities may continue to post vacancy announcements containing language excluding candidates based on criminal history only when accompanied by a notice to job seekers (Notice 3 for Job Seekers to be Attached to Job Postings with Criminal Record Exclusions) explaining that the exclusions in the posting may have an adverse impact on protected groups and informing them that individuals with criminal history records are not prohibited from applying for the posted position

u Screening and referral based on criminal record restrictions Covered entity staff should refrain from screening and refusing to make referrals because an applicant has a criminal history record Job seekers who are referred for positions where the job posting takes criminal history into account are to be given a copy ofNotice 3 For Job Seekers along with the job announcement

d Other Relevant Laws The Notices attached to the TEGL describe two other federal laws that might affect contractors employment practices regarding the use of criminal records in making hiring decisions As described in Notice 1 and Notice 2

1 The Fair Credit Reporting Act (FCRA) imposes a number of obligations on employers that wish to use criminal background checks to screen applicants This law requires the employer to obtain the applicants permission before asking a background screening company for a criminal history report and requires the employer to provide the applicant with a copy of the report and a summary of the applicants rights before the employer takes an adverse action (such as denying an application for employment) based on information in the criminal history report For more information httpwwwftcgovbcpedupubsconsumercreditcre36shtm

u [T]he Work Opportunity Tax Credit (WOTC) and the Federal Bonding Program (FBP) [are] two incentives to support employers hiring of individuals with conviction histories The WOTC provides a credit of 25-40 of first-year wages or $1 500-$2400 for employers that hire qualified individuals with felony convictions For more information httpwwwdoletagovwotc Through the FBP funded and administered by the US Department of Labor fidelity insurance bonds are available to reimburse the employer for any loss due to employee theft ofmoney or property with no employer deductible For more information httpwwwbonds4jobscomindexhtml

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The TEGL also includes an endnote (Endnote 1) regarding state and local restrictions on employer consideration of arrest and conviction records as follows

Many states and cities have enacted restrictions on employer consideration of arrest and conviction records See eg Cal Lab Codesect 4327(a) NY Correct Lawsectsect 750-755 18 Pa Cons Statsect 9125 City ofBoston Municipal Code 4-7 Covered entities should familiarize themselves with their state and local laws as well The Department of Labor is aware of the following resources on state and local laws that may be helpful (though the Department cannot guarantee the accuracy of or otherwise endorse these resources) Margaret Colgate Love Relief from the Collateral Consequences ofa Criminal Conviction A State-by-State Resource Guide (June 2008) available at http wwwsentencingprojectorgdetaillpublicationcfmpublication id= 115 Selection com State Laws and Their Impact on Use ofCriminal Records for Employment Purposes available at wwwselectioncom pdfsstatelaw criminalcheckspdf National Employment Law Project Ban the Box Major US Cities and Counties Adopt Fair Hiring Policies to Remove Unfair Barriers to Employment ofPeople with Criminal Records (Feb 6 2012) available at nelp3cdnnetabddb6b65a14826f92 n5m6bz5bppdf

6 FILING INSTRUCTIONS

Holders ofADM and LEG Binders File this ADM Notice under the Other tab in your Administrative Practices Binder

District and Area Offices EOSs and EOAs File this ADM Notice behind the tab for administrative directives in your FCCM Binder

7 DISTRIBUTION A Band C electronically

8 EXPIRATION DATE This directive remains in effect until it is revised or rescinded